Moroccan Diaspora Remittances Surge Despite Global Economic Downturn

The increase in MRE transfers is surprising for two reasons. First, it is based on two main structural factors, including global economic growth. Then, it follows the evolution of the MRE population. But these two factors do not explain the increase in remittances from Moroccans residing abroad. This scenario then leads to several hypotheses.

The declines seen in the Moroccan diaspora’s remittances between March and May could be explained by the speculative behavior of foreign banks against the dirham. Economist and foreign exchange policy specialist Omar Bakkou explains that banks that have convertible dirham accounts may not transfer the foreign currency collected from MREs, using the dirham at their disposal. This justifies a depreciation of the dirham against the euro. They proceed with the sale of these currencies in June.

Added to this is the unwavering solidarity shown by MREs towards their families in Morocco, especially in the rural world and during the drought. Thus, the trend observed in the midst of the crisis by MRE transfers reassures Bank Al-Maghrib. In view of all this, a 5% drop in MRE remittances in 2020 should be considered before a 2.4% rebound to 63 billion dirhams in 2021.

M. Bakkou notes on this point the objectivity of the central bank of Morocco which is based on the resilience observed in the past of MRE transfers and the prospects for the evolution of the world economy. He also addresses the macroeconomic and microeconomic determinants of MRE transfers, citing the evolution of the Moroccan community established abroad, the global economic situation, the banking of MREs and the cost of transfers, which are important factors for attracting fund transfers.

It should be noted that Morocco is among the countries that benefit the most from diaspora remittances. This is explained by the importance of the Moroccan community established abroad, the geographical proximity between Morocco and the main host countries, as well as the policies put in place by the authorities and which facilitate the strengthening of the attachment of Moroccans of the world to their country of origin, observes La Map.